Contributed by Megan Webb-Morgan
You hear it everywhere: fifty percent of small businesses fail in the first five years. It can get discouraging to hear that statistic quoted so many times while working day and night to get your small business up and running.
According to Michael Ames in Small Business Management, one of the top reasons why small businesses fail is due to insufficient capital. So, to ensure your startup’s success, be sure to acquire sufficient capital and stretch your budget to keep costs down. From the standard small business loan to your great aunt, be sure you’re making the right choices.
Friends and Family
Your friends and family are the first people you’ll approach about funding your new business. Research reported by StartupSmart found that the most frequently used source of startup capital for small businesses was owners’ and relatives’ savings and assets.
Beyond Friends and Family
The newest trend in financing startups – especially creative or innovative businesses with popular appeal – is crowdsourcing. Crowdsourcing entails using the viral power of the internet to request funds from a large number of people who don’t know you but want to see your business succeed.
Small Business Loans
Loans, credit cards, and lines of credit are often sourced as a strategic means for small businesses acquire funding – in their early years, up to three-quarters of their funding comes from these sources.
Stretching Your Budget
In addition to borrowing capital from friends, family, and banks, you can help your business get off the ground by reducing up-front costs. The less money you need to produce up-front, the more likely you’ll be able to get your business started on an even footing.
Having enough money is integral to both starting a business and keeping it running through economic ups and downs. With various types of loans, crowdsourcing, and cost-cutting, you can help your new business become a long-term success.
Megan Webb-Morgan is a web content writer for B2B lead generation resource, ResourceNation. She writes about small business, focusing on topics such as business sales. Follow Resource Nation on Facebook and Twitter, too!